Drug Pricing Investigation - AbbVie-Humira and Imbruvica Staff Report Committee on Oversight and Reform
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Drug Pricing Investigation
AbbVie—Humira and Imbruvica
Staff Report
Committee on Oversight and Reform
U.S. House of Representatives
May 2021
oversight.house.gov
EXECUTIVE SUMMARY
This staff report describes the actions of AbbVie Inc. in repeatedly raising the prices of
two of its blockbuster drugs: Humira (adalimumab) and Imbruvica (ibrutinib). These price
hikes contributed to billions of dollars in corporate profits and enriched company executives
while harming American patients and taxpayers. AbbVie pursued a variety of tactics to increase
drug sales while raising prices for Americans, including exploiting the patent system to extend
its market monopoly, abusing orphan drug protections to further block competition, and
engaging in anticompetitive pricing practices.
Humira, a drug used to treat rheumatoid arthritis and other autoimmune diseases, is the
highest grossing drug in the world. In 2020 alone, AbbVie collected $16 billion in U.S. net
revenue for Humira. Today, AbbVie charges approximately $77,000 for a year’s supply of
Humira—470% more than when the drug was launched in 2003.
AbbVie and its partner Janssen Biotech, Inc., a Johnson & Johnson subsidiary, are the
sole U.S. manufacturers of Imbruvica, a drug approved to treat mantle cell lymphoma and certain
other forms of cancer. Under the companies’ collaboration agreement, AbbVie is responsible for
marketing Imbruvica in the United States, including pricing decisions. Today, AbbVie and
Janssen charge over $181,529 for a year’s supply of Imbruvica—82% more than when the drug
was launched in 2013. Experts estimate that by 2026, Imbruvica will be the fourth highest
grossing drug in the United States, in part because of price increases.
The findings in this report are based on the Committee’s review of more than 170,000
pages of internal documents, communications, and data related to Humira and Imbruvica from
2009 to the present. The Committee requested these materials more than two years ago, but
AbbVie obstructed the Committee’s investigation. In September 2020, Chairwoman Carolyn B.
Maloney notified Committee Members of her intent to issue a subpoena to AbbVie due to the
company’s refusal to cooperate with the Committee’s investigation. After this notice, AbbVie
finally began to produce long overdue materials in response to the Committee’s requests.
The Committee’s investigation uncovered the following key findings:
• Uninhibited Price Increases: Since launching Humira in 2003, AbbVie (and its
predecessor company Abbott Laboratories) have raised the drug’s price 27 times,
including by nearly 30% in one 10-month period. A 40-milligram syringe of Humira is
now priced at $2,984, or $77,586 annually—a 470% increase from the drug’s launch.
AbbVie has also raised the price of Imbruvica by 82% since launching the drug in 2013.
Today, Imbruvica is priced at $181,529 per year for a patient taking three pills per day,
compared to $99,776 per year at launch.
• Price Increases Not Justified by Rebates: Internal data show that AbbVie’s list price
increases for Humira and Imbruvica far outpaced any discounts and rebates paid to
pharmacy benefit managers and other members of the supply chain. Humira’s net
price—which subtracts discounts and rebates—increased by 110% between 2009 and
2018, from $16,663 per year to $35,041 per year. For a patient taking 3 tablets daily, the
i
annual net price of Imbruvica increased from $72,587 in 2013 to $115,533 in 2017 (the
last year for which AbbVie provided the Committee data).
• Record Corporate Revenue Driven by Price Increases: Since 2003, AbbVie has
collected over $107 billion in U.S. net revenue from Humira. AbbVie’s yearly U.S. net
revenue from Humira more than tripled from $5.3 billion in 2013—the year it separated
from Abbott—to $16.1 billion in 2020. Due in large part to AbbVie’s price increases,
Humira is the highest grossing drug in the United States. U.S. net revenue for Imbruvica
has increased from $492 million in 2014 to $4.3 billion in 2020. AbbVie’s U.S. net
revenue for both drugs has increased every year since the drugs entered the market, as
shown in the two graphs below.
AbbVie U.S. Net Revenue for Humira
18
$16.1
16
$14.9
$13.7
14
$12.4
12
Net Revenue ($Billions)
$10.4
10
$8.4
8
$6.5
6 $5.2
$4.4
4 $3.4
$2.9
$2.5
$2.2
$1.6
2 $1.2
$0.8
$0.6
$0.2
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ii
AbbVie and Janssen U.S. Net Revenue for Imbruvica
5000
4500 $4,305
4000 $3,830
3500
Net Revenue ($Millions)
$2,968
3000
2500
$2,144
2000
$1,580
1500
$986
1000
$492
500
$14
0
2013 2014 2015 2016 2017 2018 2019 2020
• Hundreds of Millions in Executive Compensation and Bonuses: Since separating
from Abbott in 2013, AbbVie has paid its highest-ranking executives over $480 million
in compensation. AbbVie’s CEO Richard Gonzalez alone was paid nearly $170 million
over that period. AbbVie’s internal documents show that from 2015 to 2018, senior
executive bonuses were tied directly to Humira net revenue, allowing them to profit from
AbbVie’s price increases. The first year this net revenue incentive was added to the
calculation coincided with the highest period of price increases in Humira’s history—
over 30% in a 10-month period.
• Lack of Medicare Negotiation Costing Taxpayers Billions: U.S. law prohibits
Medicare from negotiating directly with drug companies to lower prices. According to
AbbVie’s internal data, the company collected nearly $10 billion in Humira net revenue
from Medicare Part D between 2010 and 2018. If Medicare had received the same
discounts during that period as the Department of Defense—which is permitted to
negotiate directly for lower prices—taxpayers would have saved $7.4 billion. Similarly,
if Medicare had received the same discounts during that period as the Department of
Veterans Affairs, taxpayers would have saved $7 billion. AbbVie also collected $4.7
billion in Imbruvica net revenue from Medicare Part D between 2014 and 2018. If
Medicare had received the same discounts as the Department of Defense and Department
of Veterans Affairs, taxpayers would have saved $1.6 billion.
• Targeting the U.S. for Higher Prices: Humira and Imbruvica are much more expensive
in the United States than in other countries that negotiate directly with drug companies to
iiilower prices. In 2015, a single syringe of Humira cost $1,000 more in the United States
than in countries such as Canada, Japan, Korea, and the United Kingdom. Over time,
AbbVie raised the price of Humira in the United States while being forced to reduce the
price internationally.
Similarly, in 2018, AbbVie charged nearly double for Imbruvica in the United States as
compared to Australia and countries in Europe, such as the United Kingdom and France.
AbbVie’s internal records include hundreds of pages of complaints from U.S. patients
and caretakers who described the tremendous burden Humira’s constantly increasing
price placed on them and their loved ones. One retiree with Crohn’s disease who could
not afford the drug called AbbVie’s pricing “unconscionable.” The daughter of another
patient who relied on Humira wrote to AbbVie that its efforts to block more affordable
alternatives from coming to market were “cold, and heartless.”
• Exploitation of the U.S. Patent System to Extend Humira and Imbruvica
Monopolies: Internal company documents show that AbbVie views the U.S. patent
system as far more protective of its pricing monopoly than patent systems in the rest of
the world. AbbVie has obtained or applied for over 250 patents on Humira to block
competition from lower-priced biosimilars. The last of these patents is set to expire in
2037. Approximately 90% of AbbVie’s patent applications were filed after Humira was
already approved and brought to market, suggesting that they were intended to block
competition and protect revenue rather than necessary to incentivize the company’s
development of the drug. AbbVie’s CEO has publicly acknowledged the company’s
strategy of overwhelming competitors by filing hundreds of patents on Humira,
regardless of whether they are valid under U.S. law. The company has also obtained or
ivfiled for over 150 patents on Imbruvica to delay generic competition, with the last of
these patents set to expire in 2036.
• Patent Settlements Delayed U.S. Entry of Humira Competition, Costing U.S. Health
Care System $19 Billion: AbbVie delayed competition from lower-priced biosimilar
versions of Humira until January 2023 by entering into settlement agreements with
potential competitors that challenged Humira’s patents. New documents show that these
settlements allowed AbbVie to delay competition far beyond what its own internal
assessments of the strength of its patent portfolio predicted. In 2014, AbbVie’s
executives estimated that three to five biosimilar competitors would enter the market by
the first quarter of 2017. AbbVie ultimately entered into settlement agreements with
four of these competitors, delaying their entry into the market until 2023.
Internal analyses obtained by the Committee raise new questions about whether the 2023
entry dates agreed to between AbbVie and its competitors were truly negotiated
compromises reflecting the odds of the parties’ success in patent litigation or whether
AbbVie—in violation of U.S. antitrust law—transferred items of value to its competitors
in exchange for them staying off the market.
According to an internal analysis obtained by the Committee, earlier biosimilar entry
would have forced a reduction in the price of Humira that would have saved the U.S.
health care system at least $19 billion from 2016 to 2023.
• Abuse of the Orphan Drug Act: AbbVie protected its Humira monopoly by abusing
the Orphan Drug Act (ODA), a law that incentivizes the development of drugs that treat
rare diseases and conditions. Contrary to the stated purpose of the ODA, AbbVie sought
orphan drug protections for Humira even though it was a blockbuster drug with billions
of dollars in sales each year. Today, AbbVie holds eight orphan designations and
approvals for Humira. AbbVie also secured longer market exclusivity periods under the
ODA by seeking separate, staggered market approvals and exclusivity periods for
different age groups of patients affected by the same rare disease.
• Shadow Pricing with Amgen: AbbVie’s largest competitor for Humira is Enbrel,
Amgen’s blockbuster biologic treatment for rheumatoid arthritis and other conditions.
Instead of pricing Humira and Enbrel below one another to gain market share—as
expected in a competitive market—AbbVie and Amgen engaged in a practice known as
“shadow pricing,” consistently following the other company’s price increases. As a
result, both companies repeatedly raised the price of Humira and Enbrel by nearly
identical amounts. The graph below shows AbbVie’s and Amgen’s pricing for Humira
and Enbrel from 2003 to 2021.
vHumira and Enbrel: Price of an Annual Course of Treatment
$80,000.00
$70,000.00
$60,000.00
$50,000.00
$40,000.00
$30,000.00
$20,000.00
$10,000.00
$-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Humira Enbrel
• Profit-Driven Research Expenditures: In response to the Committee’s request,
AbbVie identified a total of $5.19 billion in “Humira Research & Development”
expenditures between 2009 and 2018—approximately 4.2% of the company’s Humira
worldwide net revenue over that period.
AbbVie’s internal documents and data show that a large portion of AbbVie’s research
expenditures on Humira were dedicated to extending its market monopoly by limiting
biosimilar competition through “enhancements” to Humira. One internal presentation
emphasized that one objective of the “enhancement” strategy was to “raise barriers to
competitor ability to replicate.” The presentation also identified the “Humira High
Concentration” and “Sustained Release” formulations as furthering AbbVie’s goal of
“Biosimilar defense.”
viAlthough AbbVie has argued that its clinical trial expenditures are made with “low odds
of success,” the Committee’s investigation found that AbbVie internally assessed that its
expenditures on Humira clinical trials were relatively low-risk and predicted they would
result in substantial returns even after adjusting for the possibility of failure. For
example, while the projected cost of clinical studies to evaluate Humira as a treatment for
mild to moderate Crohn’s disease was estimated at $34.63 million, the company
projected the risk-adjusted value of the project to be $923 million.
viiTABLE OF CONTENTS
I. PRICE INCREASES ........................................................................................................ 1
II. RISING CORPORATE PROFITS ................................................................................. 4
A. Growing Revenues ................................................................................................ 4
B. Revenue Targets Driving Price Increases ........................................................... 6
III. EXECUTIVE BONUSES INCENTIVIZING PRICE INCREASES ........................... 8
IV. CHARGING MORE TO U.S. PATIENTS AND TAXPAYERS ................................ 10
A. Targeting U.S. Market for Price Increases ....................................................... 10
B. Lack of Medicare Negotiation Costing Taxpayers Billions............................. 13
C. Harm to U.S. Patients and Local Governments ............................................... 15
D. Patient Support Programs Generate Profits for AbbVie ................................ 17
V. ANTICOMPETITIVE CONDUCT TO DELAY HUMIRA BIOSIMILARS .......... 20
A. Exploiting U.S. Patent System to Extend Humira’s Monopoly ...................... 23
B. Patent Settlements to Delay U.S. Entry of Humira Biosimilars ..................... 26
C. Abusing Orphan Drug Act to Defend Humira Monopoly .............................. 30
VI. SHADOW PRICING WITH AMGEN ......................................................................... 33
VII. LEVERAGING U.S. PATENT SYSTEM TO DELAY IMBRUVICA GENERICS 36
VIII. PROFIT-DRIVEN RESEARCH EXPENDITURES ................................................... 37
A. Humira Research Focused on “Biosimilar Defense” ....................................... 37
B. Research Expenditures Were a Small Fraction of Revenue ........................... 43
IX. PRICE INCREASES NOT JUSTIFIED BY COSTS .................................................. 45
A. Rebates ................................................................................................................. 45
B. Manufacturing..................................................................................................... 47I. PRICE INCREASES
Humira
The Food and Drug Administration (FDA) first approved Humira (adalimumab) in
December 2002 as an injectable biologic agent to treat moderate to severe rheumatoid arthritis. 1
FDA later approved the use of Humira for the treatment of other inflammatory diseases,
including: psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, plaque psoriasis, juvenile
idiopathic arthritis, ulcerative colitis, pediatric Crohn’s disease, hidradenitis suppurativa, and
uveitis. 2 Patients self-administer injections, with the most common dose requiring one 40-
milligram injection every other week. 3
When AbbVie’s precursor, Abbott Laboratories, launched Humira in 2003, it set the price
at $522 per 40-milligram syringe. 4 Abbott Laboratories raised the price of Humira 13 times to
$1,024 per syringe by 2013. 5 In January 2013, Abbott Laboratories spun off AbbVie as a
separate company. 6
After the spinoff, AbbVie raised the price of Humira another 14 times, including by 30%
within one 10-month period. 7 Humira is now priced at $2,984 per syringe, or $77,586
annually—a 470% increase from when the drug entered market. 8 Figure 1 below shows the
price for a Humira syringe from 2003 to the present. 9
1
Letter from Director Jay P. Siegel, Center for Biologics Evaluation and Research, Food and Drug
Administration, to Jeanne Fox, Senior Director, PPD Regulatory Affairs, Abbott Laboratories (Dec. 31, 2002)
(online at www.accessdata.fda.gov/drugsatfda_docs/appletter/2002/adalabb123102L.htm).
2
See Food and Drug Administration, Approved Label for Humira (Mar. 2020) (online at
www.accessdata.fda.gov/drugsatfda_docs/label/2020/125057s415lbl.pdf).
AbbVie Inc., Humira (adalimumab): Moderate to Severe Rheumatoid Arthritis (online at
3
www.humira.com/rheumatoid-arthritis/after-starting-treatment) (accessed on May 18, 2021).
4
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
5
Id.
6
This memorandum uses “AbbVie” to describe the company both before and after the spinoff except where
the distinction between Abbott and AbbVie is relevant.
7
Id. This 10-month period was from March 31, 2015, when the price of one Humira injection was $1,456,
and January 21, 2016, when Humira was priced at $1,898.
8
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira. The annual calculation is for a
patient that injects Humira every other week.
9
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
1Figure 1: Price of Humira 40-Milligram Syringe
$3,500.00
$2,984.09
$3,000.00
$2,500.00
$2,000.00
$1,500.00
$1,000.00
$522.64
$500.00
$-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
These price increases cannot be fully explained by rising discounts and rebates paid to
pharmacy benefit managers and other members of the pharmaceutical supply chain. As
explained in Section IX below, AbbVie’s price increases far outpaced any rebates and discounts.
The net price of Humira—the drug’s price after accounting for all discounts and rebates—
increased by 110% from 2009 to 2018. 10
Imbruvica
FDA first approved Imbruvica (ibrutinib) in November 2013 to treat mantle cell
lymphoma. FDA later approved Imbruvica for the treatment of five other cancers or conditions.
The FDA-approved label directs patients to take three to four tablets of 140-milligram Imbruvica
daily, depending on the patient’s condition. 11
Under a 2011 collaboration and license agreement, AbbVie’s subsidiary, Pharmacyclics,
sells Imbruvica in the United States in partnership with Janssen Biotech, Inc. (Janssen), a
10
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn B.
Maloney, Committee on Oversight and Reform (Sept. 11, 2020). Although the Committee’s investigation only
obtained data through 2018, it is likely that this trend continued into 2021.
11
Food and Drug Administration, Imbruvica® (ibrutinib) capsules, for oral use; Imbruvica® (ibrutinib)
tablets, for oral use (Feb. 2018) (online at www.accessdata.fda.gov/drugsatfda_docs/label/2018/210563s000lbl.pdf).
2subsidiary of Johnson & Johnson. 12 The companies share equally in the profits from
Imbruvica. 13 Although the companies also share decision-making authority, AbbVie is the lead
party for commercialization efforts in the United States, including pricing. 14
When introduced in 2013, the price of Imbruvica was $91.11 per 140-milligram tablet—a
yearly price of $99,766 for patients taking three tablets daily and $133,022 for patients taking
four tablets daily. The companies have since raised the price of the drug nine times. Today, the
price of an annual course of treatment is $181,529 for a patient taking three tablets daily, and the
price of an annual course of treatment is $242,039 for a patient taking four tablets daily. 15
Figure 2 shows the price of Imbruvica tablet from 2013 to the present.
Figure 2: Price of Imbruvica 140-Milligram Tablet
$175.00 $166
$150.00
$125.00
$100.00
$91
$75.00
$50.00
$25.00
$-
2013 2014 2015 2016 2017 2018 2019 2020 2021
The price increases for Imbruvica cannot be fully explained by rising discounts and
rebates paid to pharmacy benefit managers and other members of the pharmaceutical supply
chain. As explained in Section IX below, the annual net price of Imbruvica—which accounts for
12
The original agreement was between Pharmacyclics and Janssen Biotech, Inc. In 2015, AbbVie acquired
Pharmacyclics for $21 billion. AbbVie to Buy Pharmacyclics in $21 Billion Deal, Wall Street Journal (Mar. 5,
2015) (online at www.wsj.com/articles/abbvie-to-buy-pharmacyclics-in-21-billion-deal-1425528086).
13
See Collaboration and License Agreement, ABV-HOR-3128.
14
See id. at 3188 (Collaboration and License Agreement § 5.1.3).
15
IBM Micromedex Redbook, Wholesale Acquisition Cost for Imbruvica.
3rebates and other discounts—increased from $72,587 in 2013 to $115,533 in 2017 for a patient
taking three tablets daily. 16
II. RISING CORPORATE PROFITS
A. Growing Revenues
Humira
AbbVie’s price increases for Humira have enabled the company to increase its revenue
by tens of billions of dollars. Since 2003, AbbVie has collected over $170 billion in worldwide
net revenue from Humira, including $107 billion from the U.S. health care system. 17
These price increases have made Humira the highest-grossing drug in the United States.
In 2020 alone, AbbVie collected nearly $16 billion in U.S. net revenue for Humira—nearly $10
billion more than 2014. 18 For comparison, the total net revenue for the second-best selling drug
in the United States in 2019—the cancer medication Keytruda—was $6.3 billion.19
Figure 3 below reflects AbbVie’s U.S. net revenue for Humira since its introduction. 20
16
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn B.
Maloney, Committee on Oversight and Reform (Jan. 22, 2021). AbbVie stated that it was unable to provide the
2018 figure due to complexities associated with the company’s introduction of a single tablet formulation that year.
17
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairman Elijah E.
Cummings, Committee on Oversight and Reform (Feb. 4, 2019); Letter from Gibson, Dunn and Crutcher LLP, on
behalf of AbbVie Inc., to Chairwoman Carolyn B. Maloney, Committee on Oversight and Reform (Jan. 14, 2021);
Abbott Laboratories, Form 10-K (2003-2013) (online at www.abbottinvestor.com/financials/sec-filings); AbbVie
Inc., Annual Reports (2013-2020) (online at https://investors.abbvie.com/sec-filings).
18
AbbVie Inc., 2020 Form 10-K Annual Report (Feb. 19, 2021) (online at https://investors.abbvie.com/sec-
filings/sec-filing/10-k/0001551152-21-000008).
The Top-Selling Drugs in the U.S. in 2019, Axios (Aug. 12, 2020) (online at www.axios.com/top-selling-
19
drugs-america-2019-f32a8818-a37c-4581-a805-bcf73942c1de.html); Merck & Co., Inc., 2019 Form 10-K Annual
Report (Feb. 26, 2020) (online at
www.sec.gov/Archives/edgar/data/0000310158/000031015820000005/mrk1231201910k.htm).
20
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairman Elijah E.
Cummings, Committee on Oversight and Reform (Feb. 4, 2019); Letter from Gibson, Dunn and Crutcher LLP, on
behalf of AbbVie Inc., to Chairwoman Carolyn B. Maloney, Committee on Oversight and Reform (Jan. 14, 2021);
Abbott Laboratories, Form 10-K (2003-2013) (online at www.abbottinvestor.com/financials/sec-filings). AbbVie
Inc., Annual Reports (2013-2020) (online at https://investors.abbvie.com/sec-filings).
4Figure 3: AbbVie U.S. Net Revenue for Humira
18
$16.1
16
$14.9
$13.7
14
$12.4
12
Net Revenue ($Billions)
$10.4
10
$8.4
8
$6.5
6 $5.2
$4.4
4 $3.4
$2.9
$2.5
$2.2
$1.6
2 $1.2
$0.6 $0.8
$0.2
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Imbruvica
AbbVie’s price increases for Imbruvica have also led to billions in revenue for the
company. AbbVie and its partner, Janssen, have collected over $16 billion in U.S. net revenue
from Imbruvica, including nearly $15 billion since AbbVie acquired Pharmacyclics in 2015. In
2020 alone, AbbVie and Janssen collected more than $4.3 billion in U.S. net revenue for
Imbruvica, nearly nine times the amount collected in 2014. 21
Experts estimate that by 2026, Imbruvica will be the fourth highest selling drug in the
United States. 22
21
AbbVie Inc., 2020 Form 10-K Annual Report (Feb. 19, 2021) (online at
https://investors.abbvie.com/static-files/b1ca3ffe-226e-499d-992e-344f42d470d1); Letter from Gibson, Dunn and
Crutcher LLP, on behalf of AbbVie Inc., to Chairman Elijah E. Cummings, Committee on Oversight and Reform
(Mar. 21, 2019).
22
Evaluate, EvaluatePharma World Preview 2020, Outlook to 2026 (July 2020) (online at
www.evaluate.com/thought-leadership/pharma/evaluatepharma-world-preview-2020-outlook-2026).
5Figure 4 below reflects U.S. net revenue for Imbruvica over time. 23
Figure 4: AbbVie and Janssen U.S. Net Revenue for Imbruvica
5000
4500 $4,305
4000 $3,830
3500
Net Revenue ($Millions)
$2,968
3000
2500
$2,144
2000
$1,580
1500
$986
1000
$492
500
$14
0
2013 2014 2015 2016 2017 2018 2019 2020
Together, AbbVie’s U.S. net revenue for Humira and Imbruvica totaled over $80 billion
between 2015 and 2020. This amounted to 49.7% of the company’s global revenue, even though
the company sells over a dozen drugs worldwide. 24
B. Revenue Targets Driving Price Increases
Since Humira came to market in 2003, AbbVie and its predecessor company, Abbott,
have raised the price 27 times. 25 Internal documents suggest that AbbVie executives made
pricing decisions—including accelerating previously planned price increases—to reach revenue
targets.
For example, in March 2011, company executives began considering whether to
accelerate a 6.9% price increase from September 2011 to August 2011. They circulated an
AbbVie Inc., 2020 Form 10-K Annual Report (Feb. 19, 2021) (online at
23
https://investors.abbvie.com/static-files/b1ca3ffe-226e-499d-992e-344f42d470d1); Letter from Gibson, Dunn and
Crutcher LLP, on behalf of AbbVie Inc., to Chairman Elijah E. Cummings, Committee on Oversight and Reform
(Mar. 21, 2019).
24
AbbVie Inc., Annual Reports (2013-2020) (online at https://investors.abbvie.com/sec-filings).
25
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
6analysis that estimated the change would yield $22.6 million in additional net revenue. 26 The
company ultimately moved the price increase even earlier to May 2011, raising the price of
Humira from $838 to $896 per syringe. 27
Similarly, in March 2013, executives began expressing concerns about Humira revenue
falling behind the company’s revenue targets, despite the company having already increased the
price by 6.9% in January 2013. 28 A few months later, executives recommended that AbbVie
increase the price of Humira by 6.9% in July 2013, explaining that such an increase would result
in “$153MM incremental 2013 Net Sales and $132MM Margin.” 29 AbbVie executed that price
increase on July 3, 2013, raising the price of Humira from $1,095 to $1,170 per syringe. On
December 27, 2013, AbbVie again raised the price of Humira by 6.9%—the third time that year.
As a result of these price increases, AbbVie collected more than $5.2 billion in Humira U.S. net
revenue in 2013, which alone accounted for more than 27% of the company’s worldwide net
revenue that year. 30
In July 2014, AbbVie increased the price of Humira by 7.9%. 31 Later that year, AbbVie
executives estimated that the net revenue for its immunology business group would fall $50.3
million short of its target. In response, the company moved forward a planned second 7.9%
price increase for Humira from late-December to mid-November 2014. According to the
executives, accelerating the price increase would collect $31.6 million in additional net revenue.
AbbVie executed that price increase on November 14, 2014. 32
AbbVie executives again increased prices and accelerated planned price increases in
2016 to meet and exceed revenue targets. In January 2016, executives circulated an analysis
finding that moving a planned 9.9% price increase from March to February and a planned 7.9%
price increase from September to August would generate an additional $55 million in Humira net
revenue. 33 The executives ultimately moved both price increases even earlier, to January 21,
2016, and June 23, 2016. 34
AbbVie executives warned colleagues internally that even a short delay in taking planned
price increases would cost the company millions of dollars. For example, one executive
circulated an analysis on October 8, 2018, estimating that delaying a planned Humira price
increase by 14 days—from January 1, 2019 to January 14, 2019—would cause the company to
26
ABV-HOR-00032430.
27
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
28
ABV-HOR-00032882; IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
29
ABV-HOR-00036813.
30
AbbVie Inc., 2013 Form 10-K Annual Report (Feb. 21, 2014) (online at
https://investors.abbvie.com/node/8386/html).
31
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
32
ABV-HOR-00040491; IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
33
ABV-HOR-00036196; ABV-HOR-0003619697.
34
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
7forgo upwards of $30 million in revenue. 35 In light of this analysis, AbbVie kept its plans to
raise Humira’s price on January 1, 2019. 36
III. EXECUTIVE BONUSES INCENTIVIZING PRICE INCREASES
Since spinning off from Abbott in 2013, AbbVie has collected over $100 billion dollars
in U.S. net revenue from Humira and Imbruvica, driven in large part by AbbVie executives’
decision to repeatedly raise the prices of Humira and Imbruvica. 37 AbbVie’s highest-ranking
executives were paid over $480 million in compensation during this period, much of which was
directly linked to revenue increases. 38 AbbVie’s Chief Executive Officer Richard Gonzalez
alone was paid nearly $170 million from 2013 to 2020. 39
Figure 5 below shows AbbVie’s compensation package awarded to its highest-ranking
executives in 2020. 40
35
ABV-HOR-00032081.
36
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
AbbVie Inc., Annual Reports (2013–2020) (online at https://investors.abbvie.com/sec-filings); IBM
37
Micromedex Redbook, Wholesale Acquisition Cost for Humira and Imbruvica.
38
Committee Staff calculated this figure using the Summary Compensation tables from AbbVie’s annual
SEC filings between 2013 and 2021. See AbbVie Inc., Proxy Statements (2013–2020) (online at www.sec.gov/cgi-
bin/browse-edgar?CIK=1551152).
39
Id.
40
Id.
8Figure 5
Documents and information obtained by the Committee indicate that AbbVie’s senior
executives received larger bonuses by raising the price of Humira, Imbruvica, and other drugs.
Between 2015 and 2018, senior executive bonuses were tied directly to Humira net
revenue—providing a clear incentive to raise U.S. prices. As part of AbbVie’s “short-term
incentives,” executives were compensated based on whether the company achieved
predetermined targets for “Humira Sales.” 41
In 2014—the year before this incentive was introduced—Humira’s U.S. net revenue was
$6.52 billion. 42 The year the incentive was introduced, in 2015, AbbVie executives implemented
a 9.9% price increase in April—the largest-ever price increase for the drug—and a 7.9% price
increase in August. Overall, the first year of the incentive coincided with AbbVie’s largest price
increase in Humira’s history—over 30% in a 10-month period. 43 As a result, Humira’s U.S. net
revenue increased to $8.4 billion, the largest one-year increase to date. 44
In 2018—the final year of the incentive—Mr. Gonzalez was paid $21.2 million in
compensation. AbbVie’s internal documents reveal that a key factor in determining his bonus
amount was a determination that the company had “mostly achieved” its Humira net revenue
goal of $20.1 billion by collecting $19.7 billion in worldwide sales. 45 U.S. sales of Humira
comprise nearly 70% of the drug’s total worldwide sales. Mr. Gonzalez would likely not have
41
See AbbVie Inc., Proxy Statements (2013–2020) (online at www.sec.gov/cgi-bin/browse-
edgar?CIK=1551152).
42
AbbVie Inc., 2014 Form 10-K Annual Report (Feb. 20, 2015) (online at
https://investors.abbvie.com/static-files/9553e87d-3b88-4b34-be3d-e1ff94c89bfa).
43
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
44
Id.
45
ABV-HOR-00172913. Due to an adjustment for currency exchange rates, the company’s executive
compensation analysis reports worldwide Humira net revenue as $19.7 billion as compared to $19.9 billion in the
company’s SEC filings. See AbbVie Inc., 2019 Form 10-K Annual Report (Feb. 21, 2020) (online at
https://investors.abbvie.com/sec-filings/sec-filing/10-k/0001551152-20-000007).
9met this goal without AbbVie’s 9.7% U.S. price increase in January 2018. 46
Even in years when AbbVie’s executive bonus calculations were not expressly tied to
sales of Humira or Imbruvica, U.S. price increases for these drugs were critical to executives’
bonus calculations. In 2019, the bonus calculation focused heavily on AbbVie meeting its net
revenue and pre-tax income targets. 47 As much as 80% of the bonus calculations for the
executives was tied to pre-tax income and net revenue targets. 48 The executives barely met their
worldwide net revenue target of $33.3 billion. Without raising the price of Humira and
Imbruvica by 6.2% in 2019, the Committee estimates that AbbVie would have missed this
goal. 49 Because AbbVie met its income and revenue targets in these years, however, AbbVie’s
senior-most executives were paid $70 million in compensation in 2019. 50
IV. CHARGING MORE TO U.S. PATIENTS AND TAXPAYERS
Under current law, the federal government is prohibited from negotiating directly with
pharmaceutical companies to lower prices for Medicare beneficiaries. 51 With the federal
government unable to negotiate, U.S. patients and Medicare pay significantly more for Humira
and Imbruvica than purchasers in other countries.
A. Targeting U.S. Market for Price Increases
AbbVie has steadily increased the list price of Humira in the United States, even as other
countries have paid significantly lower prices for the drug.
The Committee obtained an internal AbbVie presentation revealing the company’s
overseas pricing of Humira in 2015. According to the presentation, the 2015 list price of a single
40-milligram syringe of Humira was $1,727 per syringe in the United States, compared to $965
46
Based on the U.S. net price information AbbVie provided to the Committee, the company’s U.S. net
revenue would have fallen approximately $544 million in 2018 without the price increase, assuming a steady
demand for the drug. With this decrease, the company would have fallen $600 million short of its worldwide net
revenue target. See Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn
B. Maloney, Committee on Oversight and Reform (Sept. 11, 2020); AbbVie Inc., 2019 Form 10-K Annual Report
(Feb. 21, 2020) (online at https://investors.abbvie.com/sec-filings/sec-filing/10-k/0001551152-20-000007).
47
See AbbVie Inc., 2019 Proxy Statements (Mar. 22, 2019) (online at https://investors.abbvie.com/static-
files/a7335bdf-48b2-44a2-b0bd-21ec26843d05).
48
Id.
49
Committee staff estimate that without these price increases and assuming a corresponding change in net
price of the products, AbbVie worldwide net revenue would have fallen to $32.1 billion. See AbbVie Inc., 2019
Form 10-K Annual Report (Feb. 21, 2020) (online at https://investors.abbvie.com/sec-filings/sec-filing/10-
k/0001551152-20-000007).
50
See AbbVie Inc., 2020 Proxy Statements (Mar. 23, 2020) (online at https://investors.abbvie.com/sec-
filings/sec-filing/def-14a/0001047469-20-001710).
51
42 U.S.C. § 1395w-111.
10per syringe in Germany, $661 in Canada, $577 in the United Kingdom, $503 in Japan, and $424
in South Korea. 52
Figure 6 below shows the prices listed in the presentation. 53
Figure 6: 2015 List Prices of a 40-milligram Humira Syringe
U.S. $1,727
Germany $965
Sweden $728
Netherlands $695
Italy $694
Spain $668
Ireland $664
Canada $661
Jordan $655
Belgium $617
Poland $601
Croatia $588
Portugal $586
United Kingdom $577
Czech Rep. $540
Hungary $532
Greece $531
Romania $508
Japan $503
Korea $424
Turkey $363
$- $500 $1,000 $1,500 $2,000
Even as the price of Humira skyrocketed in the United States, AbbVie lowered the drug’s
price in other countries. A 2016 internal presentation obtained by the Committee analyzed the
percentage change in price for the U.S. and international markets, characterizing these disparities
as “positive price in the U.S. and negative price overseas.” The presentation highlighted that
Humira’s price in the U.S. rose by 13% in 2013, 9.5% in 2014, and 12.1% in 2015, with a 9.9%
increase planned for 2016. During the same period, the price of Humira fell internationally—by
0.4% in 2013, 0.3% in 2014, and 1.1% in 2015, with a 0.4% decrease expected in 2016. 54
52
ABV-HOR-00033181.
53
ABV-HOR-00033181, slides 8-9.
54
ABV-HOR-00033663.
11AbbVie also raised the price of Imbruvica in the United States while charging
significantly lower prices abroad. In 2018, the price of Imbruvica in the United States was
double the price in other countries. Figure 7 shows the 2018 price of a 140-milligram tablet of
Imbruvica around the world, based on an analysis by the House Committee on Ways and
Means. 55
55
Committee on Ways and Means, A Painful Pill to Swallow: U.S. vs. International Drug Prices (Sept.
2019) (online at
https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/U.S.%20vs.%20Interna
tional%20Prescription%20Drug%20Prices_0.pdf).
12Figure 7: 2018 List Prices of a 140-milligram Imbruvica Tablet
U.S. $135
Denmark $97
Netherlands $80
United Kingdom $70
Australia $68
Switzerland $67
France $66
Germany $65
Sweden $63
$- $20 $40 $60 $80 $100 $120 $140
B. Lack of Medicare Negotiation Costing Taxpayers Billions
AbbVie’s pricing practices for Humira and Imbruvica have increased U.S. health care
program expenditures, especially for Medicare.
AbbVie collected more than $13.4 billion in Humira gross revenue from Medicare from
2010 to 2018. 56 Although AbbVie paid a portion of this revenue back in rebates and other
discounts, the discounts to Medicare were significantly smaller than its discounts to other
government programs permitted to negotiate directly for lower prices. AbbVie’s Humira net
revenue from Medicare—a figure that subtracts discounts and rebates—was $9.9 billion from
2010 to 2018. 57
If Medicare had received the same discounts as the Department of Defense, it would have
saved more than $7.4 billion on Humira from 2010 to 2018. Similarly, if Medicare had received
the same discounts as the Department of Veterans Affairs, it would have saved $7 billion on
Humira from 2010 to 2018. Figures 8 and 9 below highlight the difference in these discounts
and the potential savings. 58
56
Centers for Medicare and Medicaid Services, Medicare Part D Drug Spending Dashboard & Data
(online at www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-
Prescription-Drugs/MedicarePartD).
57
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn B.
Maloney, Committee on Oversight and Reform (Sept. 11, 2020).
58
Id.
13Figure 8: Lost Medicare Part D Savings for Humira as Compared to DOD
Figure 9: Lost Medicare Part D Savings for Humira as Compared to VA
AbbVie also collected more than $5 billion in Imbruvica gross revenue from Medicare
from 2014 to 2018. 59 Although AbbVie paid a portion of this revenue back in rebates and other
discounts, its discounts to Medicare were again significantly smaller than its discounts to other
government programs permitted to negotiate directly for lower prices. AbbVie’s Imbruvica net
revenue from Medicare was $4.74 billion from 2014 to 2018. 60
59
Centers for Medicare and Medicaid Services, Medicare Part D Drug Spending Dashboard & Data
(online at www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-
Prescription-Drugs/MedicarePartD).
60
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn B.
Maloney, Committee on Oversight and Reform (Jan. 22, 2021).
14According to AbbVie’s internal estimates, if Medicare had received the same discounts
as the Departments of Defense and Veterans Affairs, taxpayers would have saved more than $1.6
billion on Imbruvica from 2014 to 2018. Figure 10 below highlights the difference in these
discounts and the potential savings. 61
Figure 10: Lost Medicare Part D Savings for Imbruvica
C. Harm to U.S. Patients and Local Governments
AbbVie’s price increases have placed significant strain on U.S. patients and their
families.
A patient’s out-of-pocket costs are often directly tied to the list price of a drug. As
AbbVie has increased the price of an annual course of Humira by thousands of dollars each year,
patients’ out-of-pocket costs have also grown. A 2019 Kaiser Family Foundation study found
that the median annual out-of-pocket cost for Medicare patients on Humira was $5,471 in 2019,
which is $606 more than in 2016. 62 The 2019 median out-pocket-cost for Medicare patients on
Humira was nearly a fifth of the median per capita income of Medicare beneficiaries. 63
On July 26, 2019, the Committee held a hearing titled “The Patient Perspective: The
Devastating Impacts of Skyrocketing Drug Prices on American Families.” During this hearing,
the Committee heard from Ashley Krege—a 35-year-old woman from Houston, Texas who takes
Humira to treat her psoriasis. In her written testimony, Ms. Krege described her experience
trying to afford Humira:
61
Id. Unlike the separate DOD and VA discount rates for Humira, AbbVie provided a blended DOD/VA
discount rate for Imbruvica.
62
Kaiser Family Foundation, The Out-of-Pocket Cost Burden for Specialty Drugs in Medicare Part D in
2019 (Feb. 2019) (online at http://files.kff.org/attachment/Issue-Brief-the-Out-of-Pocket-Cost-Burden-for-Specialty-
Drugs-in-Medicare-Part-D-in-2019).
63
Id.; Kaiser Family Foundation, Medicare Beneficiaries’ Financial Security Before the Coronavirus
Pandemic (April 24, 2020) (online at www.kff.org/medicare/issue-brief/medicare-beneficiaries-financial-security-
before-the-coronavirus-pandemic) (finding that the median per capita income among Medicare beneficiaries was
$29,650 in 2019).
15To say this was a financial hardship would be an understatement. The drug costs more
than my car payment. More than my business insurance. More than my food bill each
month. But I made the decision to suck it up and pay because the drug worked.
But after months of successful pain and symptom management on Humira, I was
informed that the drug maker, AbbVie, raised the price. My new monthly payment was
going to be almost $1,100 a month.
I simply could not afford it any longer. I had to make the difficult decision to wean
myself off the drug that had provided me months of relief. It was already too expensive
for me at $750 per month. I couldn’t afford the 40% price hike. 64
AbbVie produced to the Committee more than two hundred pages of Humira patient
complaints detailing experiences similar to Ms. Krege’s. 65 In these documents, patients and
caretakers describe the burden Humira’s high—and constantly increasing—price has placed on
them and their loved ones. These complaints also reveal the shortcomings of AbbVie’s attempts
to defray the high cost of Humira through its patient assistance programs. For many patients—
including Medicare beneficiaries who are not eligible to participate—the high price of Humira
proved prohibitive.
• A retired teacher and Medicare beneficiary with Crohn’s disease wrote that
despite having a supplemental health insurance plan, her out-of-pocket costs for
Humira were more than $2,600 for a month’s supply, preventing her from
receiving treatment. She told AbbVie that it was “unconscionable that [she] or
any human being would be expected to pay such an exorbitant cost” and asked the
company to explain how AbbVie “can and does charge such an outlandish sum of
money.” 66
• A caretaker for a Crohn’s disease patient credited Humira with restoring her
father’s way of life but described the company’s efforts to block more affordable
Humira alternatives from coming to market as “cold, and heartless.” 67
AbbVie’s pricing practices for Humira also strain local governments. For example,
Rockford, Illinois Mayor Tom McNamara reported to the Committee that between August 2013
and July 2020, his city spent more than $2.5 million on Humira alone. According to data Mayor
McNamara provided to the Committee, more than 5% of the city’s employee health plan
expenditures were for Humira. 68
64
Committee on Oversight and Reform, Testimony of Ashley Krege, Hearing on the Patient Perspective:
The Devastating Impacts of Skyrocketing Drug Prices on American Families, 116th Cong. (July 26, 2019) (online at
https://docs.house.gov/meetings/GO/GO00/20190726/109861/HHRG-116-GO00-Wstate-KregeA-20190726.pdf).
65
ABV-HOR-RR-4605.
66
ABV-HOR-RR-4605, p. 141.
67
ABV-HOR-RR-4605, p. 28.
68
Email from Mayor Tom McNamara, Rockford, Illinois, to Staff, Committee on Oversight and Reform
(Sept. 1, 2020).
16The Committee also obtained internal assessments from AbbVie showing that the
company was aware that its price increases for Imbruvica contributed to higher out-of-pocket
costs for patients—particularly Medicare beneficiaries. For these patients, out-of-pocket costs
are directly tied to the list price of the drug. 69 An October 2018 company presentation produced
to the Committee notes that the rate of Imbruvica abandonment among patients covered under
traditional Medicare is 15%. The presentation also notes that traditional Medicare patients are
“exposed to the highest costs” and states that “Medicare patient cost distribution has shifted
slightly upward year over year, likely due to a combination of price increases and benefit design
changes.” 70
The Committee has received testimony from Lynn Scarfuto, a patient who has struggled
to afford Imbruvica. Ms. Scarfuto, a retired nurse from Herkimer, New York who lives with
leukemia and lung cancer, pays $13,000 per month in out-of-pocket costs for her Imbruvica. Ms.
Scarfuto told the Committee:
I spent the last years of my nursing career working to ensure my cancer patients had the
best treatment possible. Now, I am terrified I won’t be able to obtain those same
resources for myself. Instead of enjoying my retirement and focusing on my health, I
carry around the overwhelming burden of Imbruvica’s price. 71
D. Patient Support Programs Generate Profits for AbbVie
In response to criticism about the price of Humira, AbbVie frequently touts its support
programs to lower patients’ out-of-pocket costs. 72 AbbVie maintains an in-house copay
assistance program for commercially insured patients and also makes donations to third party
foundations that provide financial assistance to Medicare beneficiaries struggling to afford
copays for Humira and Imbruvica. 73 The Committee’s investigation found that these programs
have generated profits for AbbVie through increased sales.
Between 2009 and 2018, AbbVie transferred more than $39 million to a non-profit called
the Patient Access Network (PAN) Foundation. 74 Internal communications between AbbVie and
69
Kaiser Family Foundation, The Out-of-Pocket Cost Burden for Specialty Drugs in Medicare Part D in
2019 (Feb. 2019) (online at http://files.kff.org/attachment/Issue-Brief-the-Out-of-Pocket-Cost-Burden-for-Specialty-
Drugs-in-Medicare-Part-D-in-2019) (identifying the role of list price in co-insurance rates).
70
ABV-HOR-RR-0006005, Slides 8, 12.
71
Video Statement of Lynn Scarfuto, Committee on Oversight and Reform Hearing on “Unsustainable
Drug Prices (Part III): Testimony from AbbVie CEO Richard Gonzalez” (May 18, 2021).
72
AbbVie, Making Medicines Accessible (online at www.abbvie.com/responsibility/patient-health-and-
well-being/making-medicines-accessible.html) (accessed May 13, 2021).
73
AbbVie, myAbbVieAssist Overview (online at www.abbvie.com/patients/patient-assistance.html)
(accessed May 13, 2021); Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman
Carolyn B. Maloney, Committee on Oversight and Reform (Sept. 18, 2020).
74
Letter from Gibson, Dunn and Crutcher LLP, on behalf of AbbVie Inc., to Chairwoman Carolyn B.
Maloney, Committee on Oversight and Reform (Sept. 18, 2020).
17the PAN Foundation reveal AbbVie’s financial incentives for funding these programs in order to
attract and retain Humira patients who otherwise might not use the drug. On November 28,
2017, Dan Klein, the President and CEO of the PAN Foundation, emailed AbbVie’s Director of
Patient Access Programs to request a donation from the company. Mr. Klein explained that if
patients’ out-of-pocket costs were reduced through financial assistance, they would be more
likely to continue taking their “treatment”—an indirect reference to Humira:
Based upon data from CMS and the National Health and Nutrition Examination Survey,
we know that as many as one million people with ankylosing spondylitis, plaque
psoriasis, psoriatic arthritis and rheumatoid arthritis are eligible for assistance from PAN.
We also know these patients would be much more likely to start and stay on treatment if
they were not stymied by high out-of-pocket costs. 75
Mr. Klein’s appeal to AbbVie underscores the perverse incentives of a system that relies
on financial assistance programs to help patients afford their medications. These programs allow
the companies to generate higher revenues by maintaining demand while raising prices.
Although the program might shield some patients from increases in out-of-pocket costs, the
overall cost to the health care system has increased due to price increases. This cost is in turn
passed on to all patients in the form of higher insurance premiums.
Internal documents show how AbbVie sought to frame its patient assistance programs as
charity, despite the financial incentive for these payments. In an April 6, 2016, email, the Senior
Director of Global Philanthropy at the AbbVie Foundation wrote to AbbVie’s Director of Patient
Assistance Programs:
I would like to craft a few topline narrative points for consideration that pull a story
together and will work on that tomorrow (i.e. in 2015, we made ~ $1B of a $14B product
available at no cost, aggregated numbers around what we contributed charitably in the
disease space over the last 3 years, etc…). 76
Even as AbbVie made these donations, the company continued to raise the price of
Humira. Over the same three-year period described in the April 6, 2016, email, AbbVie raised
the price of Humira eight times—including three times in 2013, twice in 2014, twice in 2015,
and once in 2016—which together resulted in an 85% increase in price. Shortly after that email,
AbbVie raised the price again. 77 Over the same period, the company’s U.S. net revenue for
Humira increased from $5.2 billion in 2013 to $10.4 billion in 2016.78
AbbVie and Janssen’s internal discussions regarding Imbruvica also reveal the financial
motivations behind their donations to copay foundations. One 2016 presentation on the “optimal
75
ABV-HOR-00039036.
76
ABV-HOR-00039140.
77
IBM Micromedex Redbook, Wholesale Acquisition Cost for Humira.
78
AbbVie Inc., Annual Reports (2013-2016) (online at https://investors.abbvie.com/sec-filings).
18spend to maximize IMBRUVICA sales growth in existing and new indications in 2017”
identified payments to patient assistance foundations as one way to increase sales. 79
The presentation recommended increasing payments to foundations from $47 million to $55
million—the single largest individual expenditure in the companies’ Imbruvica promotional
budget. 80
79
ABV-HOR-RR-00012724.
80
Id.
19V. ANTICOMPETITIVE CONDUCT TO DELAY HUMIRA BIOSIMILARS
The Biologics Price Competition and Innovation Act of 2009 created an abbreviated
pathway for biosimilars (the term for versions of the same biologic drug produced by different
manufacturers) to enter the U.S. market and compete with brand-name biologic drugs, such as
Humira. 81 The Committee’s investigation found that AbbVie engaged in a series of
anticompetitive strategies to block lower-priced biosimilar versions of Humira from entering the
U.S. market. These strategies include exploiting the U.S. patent system to obtain over a hundred
patents on Humira, entering into settlement agreements with potential competitors, and abusing
the Orphan Drug Act, a law intended to incentivize the development of drugs to treat rare
diseases.
AbbVie’s conduct has suppressed biosimilar competition far beyond AbbVie’s own
internal projections. In February 2014, AbbVie executives circulated a presentation on “US
Humira Biosimilar Erosion” that projected that three to five biosimilar competitors would enter
the market by the first quarter of 2017. 82
81
42 U.S.C. § 262.
82
ABV-HOR00032198, Slide 9; see also ABV-HOR-00033937 (Feb. 2013 presentation estimating U.S.
biosimilar entry in Q1 2017 based on “IP strategy.”).
20In August 2014, AbbVie executives sent CEO Richard Gonzalez another financial
analysis projecting that Humira would face biosimilar competition in the United States no later
than July 2017 and predicted this would cause “Price Erosion” and “Volume Erosion” for
Humira sales. 83
83
ABV-HOR-00033966, Slide 12.
21However, the company engaged in a series of anticompetitive strategies (described in
detail below) to successfully delay biosimilar entry until 2023—nearly six years beyond the date
when AbbVie had previously projected biosimilars would enter the market.
By delaying biosimilar entry, AbbVie extracted billions of dollars from the U.S. health
care system. AbbVie estimated internally that had lower-priced biosimilars entered the market in
the first quarter of 2017, AbbVie’s U.S. net revenue would have decreased by $1.5 billion in
2017. According to this internal analysis, biosimilar competition would have forced a reduction
in the price of Humira that would have saved the U.S. health care system at least $19 billion
from 2016 to 2023. 84
84
See ABV-HOR-00032198, Slide 15. The $19 billion figure is the total “price variance” estimate of
biosimilar erosion. The U.S. health care system would have likely saved additional costs from a subset of patients
purchasing lower-priced biosimilars rather than Humira.
22A. Exploiting U.S. Patent System to Extend Humira’s Monopoly
The U.S. patent system seeks to incentivize innovation by granting an individual or entity
that invents a new, useful, and non-obvious process, machine, product, or substance a time-
limited right to exclude others from using that invention (i.e. a patent). To receive a patent, the
inventor must publicly disclose the details of the invention, thereby allowing other entities to use
and replicate it when the patent term expires (typically 20 years after the date on which the
patent application was filed). 85
AbbVie’s patent on Humira’s active ingredient expired on December 31, 2016. At that
time, competitors should have been free to enter the market. However, the company exploited
the patent system to obtain or apply for over 200 additional patents on Humira to block
biosimilar competition. 86
In a presentation to investors on October 30, 2015, AbbVie CEO Richard Gonzalez used
the following slide to tout AbbVie’s “Broad U.S. Humira Patent Estate.” 87
85
35 U.S.C. §§101-103; 112.
86
See U.S. Patent No. 6,090,382 (filed Feb. 9, 1996).
87
AbbVie, Long-Term Strategy (Oct. 30, 2015) (online at https://investors.abbvie.com/static-files/af79eef2-
5901-4b62-9354-982d2d95404e).
23You can also read
